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Public Expenditures and Economic Growth: Was Wagner Right? Evidence from Turkey

Gizem Uzuner (), Festus Bekun () and Seyi Akadiri ()

Academic Journal of Economic Studies, 2017, vol. 3, issue 2, 36-40

Abstract: Going by Adolph Wagner’s theory, increased in public expenditure would have a significant influence growth. However, the endogenous growth theories posit that public sector either has direct or indirect impacts on economic growth. It is on this premise, we seek to examine and validate Wagner’s theory on the impact of current, investment and transfer expenditures on economic growth over the periods 1975-2014 for Turkey, using Johansen co-integration test and Granger causality test. Findings confirm Wagner’s law through the existence of a long term relationship between the variables, while public expenditures display a significant positive impact on economic growth.

Keywords: Public expenditure; economic growth; cointegration; Granger causality; Turkey (search for similar items in EconPapers)
JEL-codes: C51 H50 O40 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:khe:scajes:v:3:y:2017:i:2:p:36-40